Business performance measurement and management promote the use of carefully selected key performance indicators to evaluate the performance of a company, its management and employees. Management theory has long recognized that the primary purpose of a company s management is to maximize shareholder value. For large companies with stock that freely trades in public securities markets, this is a simple process of monitoring stock price. For small, private companies the situation is quite different.

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Every type of business, small or large, public or private, needs to know the value of the business. You have provided good tips on how to come with a valuation for private companies. I would add that you should use more than one method of valuation to get better estimate. I am big fan of traingulation where you arrive at the valuation with 3 different methods. This will provide much better estimate.